CX Daily: The Never-Ending Battle To Curb China’s Hidden Debt
In Depth: The never-ending battle to curb China’s hidden debt
Regulators are once again playing whack-a-mole to stamp out practices local government financing vehicles (LGFVs) are employing to evade efforts to curb their borrowings.
Having loosened the reins on local government debt last year to help the economy recover from the impact of the Covid-19 pandemic, authorities this year have resumed their long-standing campaign to control and defuse financial risks. One of their main targets is hidden local government debt and in particular the borrowings of the financing vehicles they control, typically local state-owned investment companies.
In a document sent to financial institutions recently, the China Banking and Insurance Regulatory Commission (CBIRC) laid out a series of measures, both existing and new, to tackle the problem and fix loopholes that have allowed LGFVs to skirt rules on borrowing limits.
FINANCE & ECONOMY
The headquarters of Evergrande Group in Shenzhen, South China’s Guangdong province, on Feb. 9. Photo: VCG
Evergrande offers retail investors three payment options
Debt-ridden China Evergrande Group offered three options Monday to repay retail investors in its high-yield wealth management products after hundreds of them protested overdue payments Sunday.
Investors can accept cash installments, property or investors’ payables on residential units they have purchased, according to the plan announced by Du Liang, head of Evergrande’s wealth management unit.
“It is difficult for Evergrande to make 40 billion yuan ($6.2 billion) of repayments at once for the wealth management products at this moment,” Du said. Investors can expect returns as soon as Evergrande’s property projects are sold, Du said.
Evergrande hires advisers to resolve cash crisis amid protests
Beijing warns Washington against recognizing name change of Taiwan’s U.S. office
China’s foreign ministry warned the United States against recognizing a change of the name of the Taipei Economic and Cultural Representative Office in Washington to the “Taiwan Representative Office,” a change regarded by Beijing as a violation of the “One China” policy.
The Biden administration is reportedly “seriously considering” the renaming at the request of Taiwan authorities, according to a report in the Financial Times on Saturday. The report added that senior U.S. and Taiwanese officials had held in-person talks Friday in Annapolis, Maryland.
Former China Development Bank official gets 12 years in prison for bribery
Wang Xuefeng, a former head of the Shanxi provincial branch of the China Development Bank (CDB), was sentenced to 12 years in prison (link in Chinese) for taking bribes, according to a statement issued Friday by a court in Shandong province.
The CDB is the country’s biggest policy lender by assets.
Wang was also fined 2 million yuan ($310,211) for his crime. From 2008 to 2019, Wang took 23.4 million yuan in bribes as he abused his power to offer help in various projects including loan approvals and sales of office buildings, the statement said.
BUSINESS & TECH
A Meituan rider puts a takeout order into Meituan’s smart takeout cabinet. Photo: VCG
Meituan offers glimpse into how takeout delivery times are set
On-demand services giant Meituan revealed new details about how it sets delivery times for its vast legion of takeout drivers amid criticism that unrealistic deadlines force them into risky behavior.
The State Administration for Market Regulation (SAMR) and six other government agencies released guidelines (link in Chinese) July 26 urging food delivery platforms to guarantee workers an income above minimum wage, social security and insurance coverage and more relaxed delivery deadlines.
On Friday, mentioning both the guidelines and public curiosity about how delivery times are calculated, Meituan posted an article (link in Chinese) to its official WeChat account saying that the scheduled arrival time is always based on the longest of the different estimates provided by four algorithms.
Yunnan tightens aluminum production curbs in green push
Southwest China’s Yunnan province told local smelters to slash aluminum production 30% for the rest of this year to help meet goals for reducing energy use and greenhouse gas emissions.
Yunnan has become a preferred location of aluminum smelting projects and other nonferrous metal refiners in recent years because of its abundant hydropower. In 2020, the province added 2.6 million tons of aluminum capacity, up 72% from the previous year and driving up power consumption. The province originally planned to put an additional 1.4 million tons of aluminum capacity into operation this year.
Two Chinese tech stocks sizzle on latest hot concept in virtual reality
The market values of two China-listed companies soared after they announced plans to work on “metaverses,” virtual shared spaces based on technologies like virtual reality (VR) and artificial intelligence, even though they have not provided details of how they are going to turn the concept into reality.
Compared with the start of the month, the market capitalization of online game developer Shenzhen Zhongqingbao Interaction Network Co. Ltd. doubled and that of mobile internet firm Zhejiang Jinke Culture Industry Co. Ltd. gained 50%. Both said last week they planned to enter the metaverse field.
Tianqi lithium revives plan to list in Hong Kong
China’s Tianqi Lithium Corp., the world’s top producer of the metal by output, disclosed Tuesday that has a revived a 3-year-old plan to sell shares in Hong Kong.
Tianqi plans to issue shares equal to up to 20% of the company’s total issued share capital, according to a filing (link in Chinese) with the Shenzhen Stock Exchange. It will use the fresh capital to increase capacity, cover operating costs and repay debt, including the money it borrowed in 2018 to buy a 23.77% stake in the New York-traded Chilean lithium giant Sociedad Quimica y Minera de Chile S.A.
Quick hits /
Battery giant CATL invests $2 billion to boost lithium-ion product output
Shanghai resumes flights after Being spared hit from typhoon
China vows to consolidate bloated electric vehicle industry
Energy Insider /
Steel prices rise as production limits tighten
Tech Insider /
Ximalaya revives listing push amid crackdown, Huawei’s retro turn, new robot unicorn
Fujian tightens Covid restrictions as cases rise
Thanks for reading. If you haven’t already, click here to subscribe.
- MOST POPULAR